Five stocks that you can buy now despite current global crisis

Further, around 20% of its non-funded power exposure is backed by letters of comfort by other financial institutions, including infra NBFCs. Axis Bank is also aware of these investors' concerns and is making a conscious effort to increase the retail asset portfolio from the current 22% to 30% in the next three years. In addition to reducing its risk, this retail focus will also help improve its capital efficiency.

Bajaj Finance

Though promoted by the strong Bajaj Auto Group, its valuation is comparable with that of other NBFCs.

Bajaj Finance is also one of the finest players in the NBFC segment with diversified product mix across segments. Through its network of around 4,000 branches, Bajaj Finance caters to three broader segments—consumer finance (consumer durable finance, 2/3-wheeler finance, personal loans), SME segment (mortgage, small business loan, loan against securities) and commercial business (construction equipment financing). Of these, the consumer and SME segments are expected to show impressive growth in 2012-13 as well. More importantly, this growth is not affecting its asset quality or margins.

"With the net NPA (non-performing assets) at 0.12%, Bajaj Finance has no problems on the asset quality front," says Daljeet S Kohli, head, research, India Nivesh Securities. Since nearly 50% of its liability is towards banks in the form of term loans, its cost of funds will come down once the interest rate structure reduces and banks start cutting lending rates. The falling cost of funds, along with the improved yield from consumer and SME segments, should help improve its margins in the coming year.

HSIL

Though real estate is going through a tough time, the sanitary ware industry continues to grow at a reasonable pace, and this explains why analysts are bullish on HSIL, the largest sanitary ware manufacturer in India.

Its retail portfolio is bigger than the institutional one and, hence, the lower demand from developers is compensated by the retail demand, mostly from the renovation of houses. While the growth of nuclear families is one factor fuelling this demand, the other is the frequency at which the renovations are taking place. "With the rise in the standard of living, the time gap between refurbishing homes has came down to 3-5 years," says Bhavini Shah, analyst, Sushil Finance.

Though the container glass division showed impressive growth in 2011-12, its margins may be under pressure in 2012-13 due to price volatility in soda ash, the raw material for glass business, and increased landed cost of other raw material due to rupee depreciation. With the price to earnings multiple already at 10.7%, these concerns are already priced in and, therefore, investors with a long-term holding power can consider this stock.

United Bank of India

With the broader banking sector still under stress and asset quality worries plaguing the public-sector banks, the market focus is on large-cap, private-sector banks, which is why their valuations are at high levels.

This explains why the market is ignoring the United Bank of India, a mid-cap, public-sector bank, and is giving it a meagre price to earnings multiple of 3.8 times. However, the United Bank of India has shown the ability to grow in the past few years and a similar trend is expected in the coming year as well. A high CASA ratio—which improved to 40.8% in March 2012 from 39.8% in Dec 2011—is its main strength.

"United Bank should be able to maintain the CASA ratio at around 40% due to its excellent presence in eastern and north-eastern states," says Udasi. Though the asset quality remains a major concern (gross and net NPA values are at 3.4% and 1.8%, respectively) and is keeping the valuation at low levels, things should improve in the coming years due to two factors. First, the fall in interest rates will help reduce asset quality concerns on a system wide basis. Second, the effort by the prime minister to revive the power sector—increase in tariffs, plan to allow the state electricity boards to issue bonds backed by state governments and the request to provide SLR status to these bonds—should help the United Bank because it has exposure to SEBs in Rajasthan, Maharashtra and West Bengal.